2013-06-04

Cato: A Hungry World Population? Oh Well, Let Them Eat Ethanol!

…Here come the corn riots.
Climate change policies—much more than the vagaries of climate–are now beginning to create the instabilities that cooler heads have been warning about for years.
Corn prices on the Chicago Board of Trade are now at or near record levels, around $8.30 per bushel for spot delivery. The rise in recent weeks has been dramatic, driven by the perception of declining yields caused by hot and dry conditions mainly in the upper Midwest.
Much of this corn is beyond redemption as grain. High temperatures render corn’s pollen sterile, and the narrow pollination season—usually around ten days in a given field—dictates that once this time has passed, there’s likely to be very few kernels set on each ear. While rain may allow the plant to recover, its value as feed is dramatically reduced.
The U.S. corn growing region is massive in extent, so that some residual yields are always preserved. The drought of the mid-1950s was a widespread and multi-year event, but it only reduced yields (the amount produced per acre) around 20%. The current drought is comparable in extent, but not in magnitude nor in duration. Yet.
What we have seen is a change in policy, not of the weather.”
Back then, the average yield was around 45 bushels per acre (a bushel is 56 pounds of shelled corn), and rising at a pretty constant rate that began with the large-scale adoption of hybrid corn, which began in the 1930s.
Despite the wailings of Paul Ehrlich and his tiresome compatriots, there were no great famines because of some fantasy “limits to growth” that were forecast to soon to be breached. Instead, corn yields continued their steady climb. A good year now yields around 160 bushels. Between then and now, there have been several bad years caused by drought, heat, and blights, and pretty much every one of them has seen the same percentage toll on yields, about 25 % of the maximum expected value at the time.

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